One thing is certain about life - it is unpredictable. You can never tell what is going to happen, but what you can do is take the necessary steps to secure yourself and your loved ones from unexpected occurrences such as untimely death. Life insurance provides the necessary coverage to make sure your loved ones can deal with the unforeseen costs of hospital bills. A smart investment would be to get term insurance.
Term insurance is a type of life insurance that covers a period or “term” of years. It is the purest form of protection policy since the nominee gets the entire sum assured at once. If invested in at an early age, a term insurance guarantees lower premiums and acts as good investment plans. Depending on your age, pre-existing diseases, the inclusion of riders and family needs, the term of the insurance plan can be decided. If the insured dies during that time, a death benefit is paid to the nominee(s). If the insured outlives the term period, the insurance plan matures.
While term insurance is a type of life insurance, its definition differs from that of traditional life insurance. The most common difference is that term insurance provides only a death benefit while traditional life insurance provides a death and maturity benefit. Another difference is that term insurance is more affordable and provides higher coverage, unlike traditional life insurance that comes with a high premium amount, low returns, and average coverage. The third difference would be the flexibility of these insurance plans. It is much easier to surrender term insurance than traditional life insurance.
1. Premium amounts are low. Buying term insurance early on in life a low premium amount. But if you were to purchase the same term insurance a few years later, the premium amount will be higher.
2. Security against unfortunate events. Buying a term plan provides them with the much-needed financial security to deal with unfortunate events such as an untimely accident or death.
3. You and those dependent on you get covered early. Why risk yours and your loved ones lives by delaying getting the term insurance? Investing in term insurance provides a safety net against financial hardships and reduces unnecessary worries being passed on for your loved ones to take care of in case of your untimely death.
4. Helps achieve long-term goals. Investing in term insurance is planning a long-term financial goal. It builds a corpus that can be used in different ways. This is also a good way to secure a stress-free retirement life.
5. Get to enjoy the tax benefits. This is one of the best reasons why you should consider investing term insurance. You can claim tax deduction for the premium amount and in case of the death of the policyholder, the sum claimed is wholly exempted from taxes.
6. Flexible policy terms. Flexibility in policy terms can reap many benefits. Depending on the time, family needs, pre-existing diseases, etc. the term insurance can be personalized to suit the insured and riders. A longer tenure guarantees cheaper premiums.
7. Sound financial planning. Plan early to secure a stable future. Sound financial planning helps you and your loved ones to deal with unexpected financial situations. Term insurance is a smart investment since it makes sure your future is hassle-free.
8. Perks of additional benefits. Different riders included term insurance can increase the list of perks and additional benefits. This can include riders such as critical illness rider, partial disability rider and more.
9. Acts as an income replacement. In case of untimely death of the breadwinner (also the policyholder), sum assured amount of the term insurance acts as an income replacement - it aids in dealing with the immediate financial needs.
10. Brings discipline in saving money. Such investment plans require a premium to be paid monthly/quarterly/yearly. This enables the insured to bring a sense of discipline in systemic saving that allows regular premium payments.
Term insurance is a smart investment and a step in the right direction towards securing your future with sound financial planning. Early investment reaps better tax benefits, lower premiums and provides a safety net for your family to deal with financial burdens.
This article was created by TNM Brand Studio